Online shopping trends are here it is expected to remain strong this 12 months, but e-commerce is more fragmented than ever. With brands selling on so many platforms – from the TikTok store to established marketplaces, live shopping and their very own channels – you’d think it could be easier for shoppers to find what they’re looking for. But this is not true at all, and buyers often have to spend a lot of time searching.
Worse still, search in its current state is now not effective for shopping because search engine optimization algorithms and the massive influx of content make it difficult to separate the wheat from the chaff.
But it’s 2024, and if there’s one thing that may supposedly solve almost any problem, it’s artificial intelligence. Then it makes sense Dreama recent e-commerce search engine that uses artificial intelligence to personalize searches and make them more relevant to users has raised a massive $50 million seed round.
Founded by e-commerce veteran Julie Bornstein, Daydream focuses on delivering personalized shopping experiences using generative artificial intelligence, machine learning and computer vision. The company plans to make the platform available in beta to U.S. consumers this fall and will focus on the fashion industry for now. It has already launched over 2,000 brands, including Net-A-Porter, Altuzarra, Jimmy Choo, Doen, Alo Yoga and La DoubleJ.
Daydream essentially allows you to search for products using natural language and image recognition – think about queries like “I’m going to a wedding in Costa Rica this summer and I need suggestions on what to wear.” You may even upload a photo of an item of clothing and add an additional filter with conversational language, equivalent to “I want it in blue.”
Forerunner Ventures and Index Ventures co-led the round, which also saw participation from Google Ventures and True Ventures. The startup didn’t disclose its valuation.
A brand new way to search
Bornstein, who has held executive positions at corporations including Nordstrom, Urban Outfitters, Sephora and Stitch Fix, believes that current search tools available in e-commerce seem dry and unpersonalized. While she acknowledged that there has been some progress thanks to the development of artificial intelligence generation, she stressed that generalized search engines often do not produce accurate results.
“We trained [consumers] for the last 20 years to find the right taxonomic word from our site and find what you are looking for. When ChatGPT launched, people working in the space thought for a long time that this was it [tech] it allows us to combine language and images in a way that allows you to express, as a consumer, what you need,” she said.
To combat this, Daydream refines pre-built models and creates a detailed product catalog dataset combined with the team’s deep understanding of the fashion world. Bornstein believes that with one of these dataset, natural language queries can produce higher results.
For his part, Bornstein realizes that the idea the startup is working on is not unique and says that good execution, tuning good models and building a great user interface are the keys to a company standing out.
Daydream is indeed entering a crowded space. Large corporations equivalent to Amazon, Google, Mastercard and TikTok are already using various sorts of artificial intelligence technologies in their shopping platforms. You also have startups like True Fit, which focuses on finding the right fit for shoppers, and Remark, which trains AI personas based on human shopping experts. Google has even been offering a somewhat similar search experience for some time, and on a smaller scale, e-commerce startups like Deft and Cherry have tried to mix image and text searches to find the right products to shop for.
Kirsten Green of Forerunner Ventures believes that Google and Amazon provide uninspiring and ineffective search tools while shopping, and that the only personalization many e-commerce corporations offer comes in the type of promoting. He believes that Daydream has the opportunity to build unique experiences through deep personalization.
“The experience that Daydream will provide reflects user preferences and becomes increasingly tailored as granularity and pattern recognition increase. It also offers the ability to consider a much broader set of products while still providing the support of a specialty store,” Green said in an email to TechCrunch.
Frédérique Dame, general partner at Google Ventures, believes Daydream will have an advantage in the market because customers expect tailored experiences. She added that the company has an experienced team that is able to meet all challenges related to user adoption of solutions.
Fortunately for Daydream, its team has extensive experience in building artificial intelligence, search technology, and e-commerce tools. Bornstein herself sold her latest AI-powered shopping service, The Yes, to Pinterest, and her chief product officer, Dan Cary, previously worked at Google’s AI research group. Daydream’s CTO is Matt Fisher, who led data and applied science at Microsoft; its chief industrial officer is Lisa Green, who has worked in technology, fashion and business development at Google, The Yes and Condé Nast; and the chief strategy officer is Richard Kim, who was the head of shopping strategy and operations at Pinterest.
Bornstein said much of the fresh capital shall be used to hire engineering talent and rapidly scale the business. Currently, the company employs 23 employees and plans to increase this number to 35 by the end of the 12 months.
She added that Daydream has no plans to fulfill orders and will simply act as a purchase discovery layer, so it’s going to currently rely on commission revenue and does not intend to generate any promoting revenue. Additionally, since it is a discovery layer, it might be possible to white-label its technology in the future, equivalent to fashion-focused visual search engine company Syte.